Great Lakes Dredge & Dock Corporation
) is currently facing investigation by shareholders rights firm,
Robbins Arroyo LLP, relating to the alleged involvement of the
officers and directors for producing false and misleading
statements about its internal controls and improperly recognizing
revenue, thus violating their duties toward shareholders.
On Mar 14, 2013, Great Lakes reported fourth quarter earnings per
share of 1 cent, falling way short of the Zacks Consensus
Estimate of 18 cents and the year-ago quarter's earnings of 12
cents per share. Sales increased 31% year over year to $207.1
million in the quarter, ahead of the Zacks Consensus Estimate of
$195 million. Dredging revenue surged 54% to a record $190
million while demolition revenue declined 52% to $16.6 million in
Great Lakes disclosed that it had recognized 2012 revenues in a
manner, which is not consistent with its accounting policy and
admitted failure of internal controls to detect or prevent
misstatements in its financial statements. Great Lakes further
revealed that second and third quarter 2012 demolition segment
revenues were overstated by $3.9 million and $4.3 million,
respectively. As a reminder, Great Lakes had reported demolition
revenue of $27.9 million in the second quarter and $31.8 million
in the third quarter of 2012.
The restatement announcement was followed by the resignation of
President and Chief Operating Officer, Bruce J. Biemeck.
Furthermore, Great Lakes stated that its inability to timely file
its 2012 annual financial results with the U.S. Securities and
Great Lakes' shares declined $1.62 or 18%, to close on Mar 15,
2013, at $7.36 per share, on unusually heavy volume. The shares
have even dipped to as low as $6.68 thereafter in contrast to the
range of $9 to $10 prior to the earnings release.
Following this, Robbins Arroyo LLP, a nationally recognized
leader in securities litigation and shareholder rights law
initiated its investigation whether Great Lakes' financial
reporting for the second and third quarter 2012 may have been
false and misleading.
The scrutiny is being carried out to ascertain whether its
officers and directors indulged in misconduct, allowing premature
recognition of revenue, permitting Great Lakes to overstate its
revenue and earnings for the quarters in question in violation of
Generally Accepted Accounting Principles and failing to establish
adequate internal controls to prevent such misconduct.
Robbins Arroyo LLP highlights that Great Lakes shareholders have
the option to pursue a shareholder derivative action, through
which they can hold insider wrongdoers accountable for their
actions, prevent future misconduct.
Great Lakes Dredge & Dock Corporation is the largest provider
of dredging services in the United States. Great Lakes is also
one of the largest U.S. providers of commercial and industrial
demolition and remediation services, mainly in the Northeast.
Great Lakes owns and operates the largest and most diverse fleet
in the U.S. industry, comprising over 200 specialized
The ongoing investigation remains a overhang on the company.
Great Lakes currently holds a short-term Zacks Rank #5 (Strong
AECOM TECH CORP (ACM): Free Stock Analysis
CHICAGO BRIDGE (CBI): Free Stock Analysis
GREAT LAKES DRG (GLDD): Free Stock Analysis
ORION MARINE GP (ORN): Free Stock Analysis
To read this article on Zacks.com click here.
Other stocks to consider in the same industry with a favorable
Zacks Rank are
Orion Marine Group Inc.
) , with a Zacks Rank #1 (Strong Buy),
Chicago Bridge & Iron
AECOM Technology Corp
), both of which carry a Zacks Rank #2 (Buy).